Jeffrey Gundlach says bitcoin 'double-top' chart at all-time highs looks scarier than this summer

Published Fri, Oct 22 20212:58 PM EDTUpdated Fri, Oct 22 20218:58 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

Widely followed investor Jeffrey Gundlach told CNBC on Friday he's concerned about bitcoin's technical set-up after the world's largest cryptocurrency by market value set a new record high earlier this week. In an interview on "Halftime Report," the DoubleLine CEO said he believes bitcoin is forming what's known as a "double top," a bearish reversal monitored by traders. A double top happens when an asset — in this case, bitcoin — hits a high price twice with a relatively modest decline in between and then experiences a considerable drop after the second peak. For bitcoin , it's too early to tell whether a double top has formed, because it would need to have a much steeper decline from Wednesday's peak than what's happened over the past two days. "The chart is scarier today than it was in July because we have a double top at 60-plus thousand [dollars] that we basically did a blow off this week," Gundlach said. "Now we've reversed back below where the top was." Back in July , Gundlach expressed a sour near-term outlook on bitcoin. At that time, the digital asset was trading around $31,200 as it struggled to gain traction after pulling back from its mid-April peak of nearly $65,000. "Right now, the chart on bitcoin looks pretty scary," Gundlach said on July 15. He added that "turning neutral at $23,000 was obviously too early, but I've got a feeling you're going to be able to buy it below $23,000 again." A few days later, bitcoin again fell below $30,000 — a key level traders had been monitoring — but since then, it's mounted a comeback. It took out its April highs on Wednesday, setting a new record at nearly $67,000 . Bitcoin began the month of October trading below $50,000 per token. The recent strength came as crypto investors geared up for the launch of the first bitcoin futures exchange-traded fund in the U.S. The ProShares Bitcoin Strategy ETF began trading Tuesday. Bitcoin was lower Thursday and again Friday, hovering around $60,600 apiece in the afternoon. Gundlach said he thinks other assets beyond just bitcoin may struggle in the weeks ahead. "I really think that a lot of things crescendoed this week. I think the bond yield rise has crescendoed this week. You'll probably get some relaxation in the near term, bitcoin, etc. Even oil I think has done that," he said. "I think we're in a countertrend move in the weeks ahead, so everything that's sort of worked for you in the last few weeks, I think it's time to fade."

Dado Ruvic | Reuters